Agenda and minutes

To receive any apologies for absence.

Apologies for absence were received from Cllr Pav Pandher and Cllr Daryl Jordan.

  (i)       To receive declarations of disclosable pecuniary and other interests from Members in respect of any item to be considered at the meeting.

 (ii)       In accordance with the Officer Employment Procedure Rules, the Strategic Director - Corporate Resources, Kevin Foster, declares a disclosable personal interest (non-pecuniary) in any items concerning the companies of which he is a Council-appointed director.  The companies are listed in the attached schedule.  The interests are such that Mr Foster may advise on those items.

In accordance with the Officer Employment Procedure Rules, the Strategic Director – Corporate Resources, Kevin Foster, declared a disclosable personal interest (non-pecuniary) in any items concerning the companies of which he was a Council-appointed director. The interests were such that Mr Foster could advise the Committee on those items.

To approve the minutes of the meeting of the Committee held on 5 November 2024 as published.

Following discussion of actions raised in the minutes of meetings on 5 November, the minutes were approved without amendment.

The Committee RESOLVED:

That the minutes of the meeting of the Resource and Finance Scrutiny Committee held on 5 November 2024 be approved and signed as a true and correct record.

To review the Committee’s work programme, the draft Executive forward plan, and the recommendations and actions tracker.

One question was raised, concerning the Overview of Complaints report, which was moved to the March meeting to facilitate a focus on the budget reports. It was requested that actions in future work programmes contain more detailed status updates.

The committee RESOLVED:

That the Work Programme be noted.

The Committee is requested to RESOLVE that members of the Communities & Housing Scrutiny Committee and Environment & Place Scrutiny Committee be permitted to participate in the discussions of items 6 – 10, and feed into any recommendations made by the Resource & Finance Scrutiny Committee to the Executive in respect of these items.

Councillor Boote moved and Councillor Rice seconded a proposal to allow those members of the Communities and Housing and Environment and Place Scrutiny Committees present to speak.  The proposal was extended to Councillor Howes who was present, noting that he was not a member of a scrutiny committee.

The motion was agreed unanimously by the members of the Resource and Finance Scrutiny Committee.

RESOLVED

That members of the Communities and Housing Scrutiny Committee and the Environment and Place Scrutiny Committee, together with Councillor Howes, be permitted to participate in the discussions of items 6 – 10, and feed into any recommendations made by the Resource and Finance Scrutiny Committee to the Executive in respect of these items.

Following the resolution, several Members expressed their dissatisfaction regarding the late publication of the extensive reports for the meeting, questioning why the papers had not been published earlier to provide an opportunity for Councillors to read and review the proposals.  Stephen Fitzgerald, Strategic Director of Finance, explained that the decision to publish the reports once the Executive agenda had been published was to ensure that the Members received the same reports the Executive would be considering at its meeting on 13 February 2025.  An all-Member briefing on the budget proposals had been held on 4 February, the key aspects of which had been in-line with the reports published later that week.  It was noted that several additional supporting documents, requested by Councillors, had been circulated the following day to support Members in their scrutiny of the budget.

The Leader of the Council, Councillor Barker,  advised that the deadline for Members’ questions to the Executive would be extended, and that all Members of the Council would be welcome to attend the Executive meeting to pose their questions directly.

Stephen Fitzgerald highlighted that this was the first time the scrutiny and executive functions had operated in this way following the changes made at the beginning of the municipal year, recognising that that best practice was still being developed and the feedback would be taken on board for next year’s budget setting process.  Kevin Foster, Strategic Director for Corporate Resource, also acknowledged that the timeline for the publication of reports could be improved in future years, adding that the Corporate Leadership Team would take collective responsibility for the inconvenience caused to Members and the delay to the scrutiny process.

An update on the General Fund Budget for financial year 2025-6

Reporting person: Stephen Fitzgerald

Stephen Fitzgerald, Strategic Director of Finance and Section 151 Officer, introduced the report to the Committee, and advised that the Budget was an important step in Woking’s financial recovery process.

There were five reports included in the full budget pack, each of which was included in the agenda. The main points of each of these reports had also been included in the finance briefing for Members held on 4 February 2025.

The General Fund Budget report focused on the Business as Usual (BAU) budget, alongside the four workstreams for change: property, hidden subsidy, procurement analysis and transformation. The proposed budget report indicated a positive step, with £2.4 million in growth and £2.5 million in savings projected. There was also discussion of the Council’s request to central government for Exceptional Financial Support of approximately £171 million.  This had been considered as a critical element of the budget and was central to several of the assumptions made regarding proposed Council Tax rates, at an increase of 2.99%. As a result of this application, the final decision on Council Tax had been delayed until a decision had been provided by the Secretary of State.

The three Strategic Directors provided an update to Members on the proposed changes to their respective directorates included within the budget. Louise Strongitharm, Strategic Director for Communities, identified five key areas where change would be visible. Further details on Fees and Charges were included in a later report, though a brief summary explained that the opportunity would be taken to bridge the gap for discretionary services, over the course of the three-year Medium Term Financial Strategy (MTFS). Alongside this, alternative solutions to existing partnerships were proposed, along with potential reductions in the meals service. Changes to community centre provision were also proposed as part of the asset transfer strategy. Finally, proposals had been made to reduce the use of B&B accommodation within the Borough, and a plan was in place to work closely with Thameswey Housing Limited (THL) to align values and ensure that they were able to work with the Authority to provide greater temporary accommodation support, to reduce the use of bed and breakfast accommodation.

Beverley Kuchar, Strategic Director for Place, followed this, advising that much of the focus for this area concerned government grants, fees and charges. Although it was noted that there were several statutory fees and charges which could not be adjusted, changes were proposed where possible. New IT infrastructure was proposed to increase robustness of the Community Infrastructure Levy and Section 106 processes, and service reviews within the Place directorate had begun.

Kevin Foster, Strategic Director for Corporate Resources, provided the final directorate update. He acknowledged that much of corporate resources was seen as overhead costs for the Council, and as such there was a need to review efficiency and demonstrate effective transformation in this area. There were a series of phase two savings to follow on from major changes made in the 2024/5 financial year, with further proposed changes through the  ...  view the full minutes text for item 6.

An update on fees & charges for financial year 2025-6

Reporting person: Stephen Fitzgerald

Stephen Fitzgerald, Strategic Director for Finance, introduced the report with a summary outlining that there would be increases in fees at varying levels across service areas. It was noted that these increases do not fully absorb the overhead costs of the services, however a transitional approach will be taken to achieve this over the coming years. It was also important that the potential impact on the most vulnerable groups was considered when putting the proposals together, particularly those concerning the Careline and meals services.

Whilst the Council maintains a duty to provide a number of services, Stephen identified that there are elements which operate as a business, and therefore it would be unfair for council taxpayers to absorb these additional costs. There are also a number of charges which are set through statute and are therefore not able to be adjusted within these proposals.

Members questioned the cost disparity between authorities on some of the services, particularly in instances where the same service provider was used by multiple boroughs. Louise Strongitharm, Strategic Director for Communities, responded that there were differences between the running of these services – for example, different call centres may be used to maintain Careline, and other authorities may have been using different providers for meals, including charities, in some instances. Further discussion referenced the potential subsidies provided by other authorities to maintain these services, something Woking was unable to do under the terms of the Section 114 Notice. Louise clarified that documentation supporting this could be provided to Members if required, but also noted that figures listed from other districts and boroughs may not have been the most up to date. It was also expressed that in spite of these perceived cost disparities, Woking was further ahead with efficiencies and service reviews than many other authorities, so these would likely become more balanced as other authorities caught up.

A further topic of discussion was the use of concessionary rates across leisure provisions, and the eligibility criteria for this. Louise Strongitharm offered to circulate the specifics to members following the meeting, however was able to identify that much of the criteria was centred around receipt of benefits. Whilst it was discussed that these were used across the majority of services, there were a number of specific activities which would be focused onto more narrow groups.

Officers were asked about the overhead costs included within the report. Louise Strongitharm clarified that alongside staffing costs, these included a proportion of HR, IT, Legal and insurance costs, among other areas, which had been distributed across service areas. An exercise had been undertaken internally to develop this overhead allocation strategy.

Discussion of the proposed changes to car parking charges also led to further questions around the balance of maintaining a level of income from the car parks in the town centre, whilst not adding to traffic issues within town and continuing to encourage the use of public transport where possible. Beverley Kuchar, Strategic Director for Place, noted that the changes took  ...  view the full minutes text for item 7.

An update on the Capital programme for financial year 2024-5 to 2028-9

Reporting person: Stephen Fitzgerald

Stephen Fitzgerald, Strategic Director for Finance, introduced the report, identifying that the capital programme was a significant portion of the makeup of the final budget, and which would lead to a capital spend of approximately £30 million. Much of the focus was around the Housing capital programme, as health and safety works were required in several properties in order to maintain compliance with standards. The Council has been limited in which other capital projects it is able to proceed with, under the terms of the Section 114 notice. Louise Strongitharm, Strategic Director for Communities, followed up on this, highlighting to Members that the Communities directorate would be the recipient of the largest share of capital funds, receiving £16 million towards required health and safety improvement works on the Council’s housing stock. This was outlined in the Housing Revenue Accounts Business Plan, as approved by Council at their meeting on 12 December 2024.

Members queried the terminology used around ‘depreciation’ which would be used to fund the asset management programme, confirming that it was linked to the run down of asset values, and linked to a transfer of approximately £4 million from revenue to capital funds. This formed part of the statute under which the Housing Revenue Account was managed, ensuring that a proportion of the rent collected from tenants was required to be reinvested into housing stock.  Members questioned whether this could be more appropriately reported as a form of sinking fund, rather than as depreciation. It was confirmed by officers that the terminology used within the report was that required the statutory bodies, however the concerns from Members were noted.

Further discussion around unitarisation was had by members, questioning whether there was any point in investing in longer-term future programmes, such as CCTV or IT infrastructure, when the authority in its current form may not exist to benefit from this. Stephen Fitzgerald, Strategic Director for Finance, reiterated that the current position on devolution and local government reorganisation was uncertain: the Council would certainly be aware and make provisions to navigate this, however it was also important to make sure that delivery of existing services did not suffer as a result of considering unitarisation.

A final question on this topic concerned in-year comparisons of borrowing, related to the current budget, on some of the Council’s major projects, such as Sheerwater and Victoria Square Woking. Kevin Foster, Strategic Director for Corporate Resource, stated that further figures on this could be provided to Members if required, and would be reported to the Shareholder Executive Committee on the 12 February. A brief summary identified that there was the risk of an overspend on Thameswey, however other areas were close to the projected figures.

The committee RESOLVED:

That the report be noted

An update on the Capital, Investment and Treasury Management Strategies and MRP Statement

Reporting person: Stephen Fitzgerald

Stephen Fitzgerald, Strategic Director for Finance, introduced the report, explaining that it formed both part of regulatory compliance and good financial practice. The scale of Woking’s debt in comparison to other local authorities was highlighted to Members. The report established the Council’s minimum revenue provision and treasury management strategies, and it was explained that successful management of investments has had a positive impact on the Council’s overall financial position. In addition, Stephen noted that Treasury Management training has also been arranged for Members.

Members asked for clarification on whether the report was CIPFA compliant, and indeed whether merely being CIPFA compliant was fit for purpose, given the past financial situations the Council had faced despite producing CIPFA compliant reports. Stephen Fitzgerald confirmed that the report was CIPFA compliant and explained that, whilst the CIPFA system might not be perfect, it did provide a degree of security and professional judgement, and therefore remained overwhelmingly beneficial.

Questions were raised regarding the recording of MRP on some elements of Woking’s debt and not others. Stephen Fitzgerald explained that calculating MRP on debts where this was possible, even if it cannot be paid or is not feasible for all elements of debt, was an important part of the Council’s Improvement and Recovery Plan.

An additional question concerned the possibility of funds being invested in foreign institutions, as outlined in the report, and Members were keen to highlight that rated institutions within the UK should be the only option used by the Council for the majority of situations.

Members questioned why the interest generated on funds raised through the Community Infrastructure Levy (CIL) was returned to the General Fund budget, rather than being reallocated to the communities along with the funds themselves. More information on the financial impact of this change was requested from Officers. It was noted that the future of the existing CIL funds was not certain given the proposals for local government reorganisation, and ward Councillors should be encouraged to bring forward proposals for the use of CIL funds.

Reviewing the report, Members asked why the long-term borrowing maturity profile had such a high figure for the financial year of 2025/6 at £338 million, compared to £95 million for 2024/25 and figures of around £20-30 million for most of the rest of the plan period.

Further questions concerned the repricing of loans and the ability to lock in low interest rates, along with the cost of refinancing. Mike Stevens, Deputy Financial Services Manager, explained that loans were repriced when they hit maturity, approximately annually, at which stage a new interest rate would be received. The administration cost to refinance loans has been reasonably low and, despite the short-term nature of the interest rates, due to low rates in the past, the loans have been able to be redeemed at a discount.

Officers were asked about the impact of the recent central government announcement that projected figures on GDP had been revised down. Brendan Bradley, Deputy Director for Finance, explained that all calculations  ...  view the full minutes text for item 9.

An update on the Housing Revenue accounts budget for financial year 2025-6

Reporting people: Stephen Fitzgerald & Louise Strongitharm

Stephen Fitzgerald, Strategic Director for Finance, and Louise Strongitharm, Strategic Director for Communities, introduced this report with a summary outlining a proposed 2.7% increase in rents, to achieve a total budget of £22.6 million. The low reserves position of the Housing Revenue Accounts, at approximately £144,000, was also identified. This was largely due to one-off costs, related to the decommissioning of properties in Brockhill and Sheerwater, and these are not anticipated to continue. The budget remained aligned with the 30-year business plan for the Housing Revenue Account, aiming to rebuild a reserve of £500 per council property. Built into this were assumptions of cost savings due to the reallocation of overhead costs, and additional borrowing to fund the capital programme. Louise was optimistic this would be a step in the right direction.

The reduction in housing stock of approximately 86 during the year was questioned by members. Louise Strongitharm identified that, alongside an assumed loss of 12 properties per year through the Right to Buy scheme, the number of properties available would also reduce due to the changes at the Brockhill and Sheerwater developments. Whilst national changes to the Right to Buy scheme may reduce this number, funds generated from Section 106 charges or Right to Buy could be used to acquire new properties and enhance the council stock.

An additional question concerning the impact on the housing waiting list was put to officers. Louise Strongitharm noted that this remained relatively static at approximately 1100, however the position of the Housing Revenue Account would not allow large scale developments to be considered as a solution at this time. Instead, the authority would need to continue to work with housing associations to identify suitable properties.

A final question was asked, regarding the financial implications of the loss of solar panels built at the Brockhill development if the site was demolished. Kevin Foster, Strategic Director for Corporate Resources, confirmed this was being reviewed by officers, and further information would be available at future meetings.

The committee RESOLVED:

That the report be noted